UMass cashes in with record $41.4M from licensing

Science literally paid off in a big way for the University of Massachusetts last year.

The university pulled in a record $41.4 million in licensing revenue and stock sales from technologies and spinoff companies developed across its five campuses, UMass officials said.

It's a big bump from the previous record the school's Commercial Ventures and Intellectual Property office set for itself in 2005, when it reaped $28.7 million and a significant jump from the $27.2 million it took in 2006.

The added revenue helps solidify the university's position as a major player for innovation in the Bay State and validates its push to be more active in the commercial space, UMass officials said.

"To get a $41.4 million year is absolutely unprecedented," said Jack M. Wilson, president.

In recent years, the university has placed a heavier focus on developing technology that can be taken beyond the classroom and used in the marketplace. It's also dedicated more resources to incubating startup companies, ratcheting up competition with private institutions such as Harvard University and the Massachusetts Institute of Technology.

"I think we're now seeing the payoff," Wilson said.



Nobel help

UMass can thank its resident Nobel Prize winner, Craig Mello, for much of that payoff. Mello, a professor at UMass' Worcester campus, is a pioneer in RNA interference, or RNAi -- a gene manipulation therapy many people in life sciences believe could be a major breakthrough for treating a variety of serious diseases.

In 2007, UMass earned $9.6 million from licensing fees and stock sales stemming from two companies specializing in RNAi technology -- Sirna Therapeutics, which was purchased by Merck late last year, and CytRX Corp.

"The revenue part of this picture is a little like hitting the lottery," said Jack Turner, associate director of MIT's Technology Licensing Office.

Typically, universities investing in technology that can be spun off into the private sector take in a steady stream of licensing revenue, Turner said. "When you have a blockbuster you generate a lot of revenue for many years," he said.

For MIT that blockbuster year came in 2001 when it earned more than $70 million in licensing revenue largely derived from Akamai Technologies Inc.'s 1999 initial public offering. In recent years that figure has leveled to about $50 million in 2005 and just over $60 million in 2007, Turner said.

Wilson said about 60 percent of UMass' licensing revenue comes from the life sciences sector. But the university isn't putting all its eggs in one basket.

Wilson cited investment in alternative energies as a major focus for the future. Earlier this week SunEthanol Inc., a biofuels technology company started at UMass' Dartmouth campus, announced it received early-stage financing from an energy company and a couple of venture capital groups.



Late to the party

UMass came late to the commercialization game, founding its licensing office in 1994. Since then the number of technology licenses it has added year-to-year has grown from two in 1994 to 78 at the end of 2007. The university spent more than $404 million on research and development this past fiscal year.

That's helped raise UMass' stature among other public universities, such as the University of Michigan and the University of California, said Chris Anderson, president of the Massachusetts High Technology Council. The boosted revenue and accelerated growth in technology investments "all provide the expectation that this is a trend and not a one-time phenomenon," Anderson said.